July 26 (Bloomberg) -- Canada's dollar reached the highest level in more than a week versus its U.S. counterpart as government data showed sales of U.S. new homes rose in June more than forecast, reviving demand for currencies related to global economic growth. The Canadian currency, nicknamed the loonie, strengthened after home purchases in the U.S. increased 24 percent from May to an annual pace of 330,000, according to the Commerce Department. U.S. stocks advanced. "You're seeing quantities bounce across the board," Firas Askari, head currency trader in Toronto at Bank of Montreal's BMO Capital Markets, said. "You're going to see an OK day for the Canadian dollar." The Canadian currency climbed as much as 0.5 percent to C$1.0303 per U.S. dollar, the strongest level since July 15, before trading at C$1.0304 at 12:07 p.m. in Toronto. The loonie traded at C$1.0358 on July 23. One Canadian dollar buys 97.05 U.S. cents. The Standard & Poor's 500 Index gained 1 percent. Crude oil for September delivery rose 0.2 percent. The Canadian dollar tends to rise and fall with commodity prices as a proxy for risk appetite. Rates Favor Loonie "Expect interest-rate differentials to favor the Canadian dollar," Dean Popplewell, an analyst at online currency-trading firm Oanda Corp. in Toronto, said in an e-mail. "Technically the currency is looking to close higher as long as we close below this C$1.0424 level." Bank of Canada Governor Mark Carney leads colleagues in the Group of Seven with rate increases as Canada's economic growth and job creation rebound faster from the global recession. Carney raised the target rate for overnight loans between commercial banks to 0.75 percent on July 20. The U.S. Federal Reserve left its key rate near zero last month and renewed a pledge to keep it low for an "extended period." Minutes of the June 22-23 session, released July 14, show officials saw no need to boost stimulus, while paring their growth forecasts and noting risks to the recovery had increased. The Canadian 10-year note's yield rose one basis point, or 0.01 percentage point, to 3.23 percent. Foreign Exchange Increases The average daily turnover of foreign exchange, which includes spot transactions, outright forwards and foreign exchange swaps, increased 9.4 percent to $57 billion in April, compared with $52.1 billion in October, according to the Canadian Foreign Exchange Committee. April's turnover totaled $1.2 trillion, compare with $1.1 trillion in October. On an average daily basis, the volume of spot and outright forwards increased by 33 percent and 20 percent, the committee's Foreign Exchange Volume Survey said today. Foreign exchange swaps decreased 1 percent. "We are coming off a post-crisis stage," Askari said. "You would expect to see an uptick as markets see a semblance of improvement." The Canadian Foreign Exchange Committee, chaired by the Bank of Canada, surveys senior representatives from eight of the nation's largest banks in April and October each year to provide information on the size and structure of Canada's foreign exchange market.

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